Closing in on a Basement Bargain
What You Can and Can't Negotiate in Closing Costs
By Kara Stefan
earn an average of 75% of men's pay. Studies have found that
women pay an average of $200 more than men for new cars. And
now a recent survey of MortgageIt.com customers reveals that
female home loan borrowers paid average closing costs of $1,114
compared to men, who paid $1,053 in fees.
It seems apparent to me that women aren't being discriminated
against; it's just that we don't fare as well in situations
that require financial negotiations--like a job, car, or house.
We're great at finding bargains, but we need to work on our
The key is to not get so caught up in the excitement of buying
a new home that you lose all sense of reasoning. Once you
agree on a price, the deal isn't done. It's actually just
The following is a primer to help you recognize all the fees--hidden
or otherwise--when it comes to closing costs on a new home.
Plus, read on to learn what you can reasonably expect to pay,
what can be negotiated, and what you should flat out refuse
Closing Costs Primer
- Lender's Title Insurance: This is a non-negotiable
fee usually determined by the state.
- Escrow/Attorney Fee: You'll need an attorney,
but you can shop around for one who charges a low fee. Most
fees fall in the same range, around $300-$400 for a basic
- Attorney Travel Fee: Look out for this one. Sometimes
when you receive your final bill, you'll have a travel fee
listed in addition to the escrow fee, up to $250 or more.
Unless you're flying an attorney to Outer Mongolia, you
really shouldn't have to cover an attorney's travel costs.
- Appraisal Fee: This fee depends on the value of
the home, but the range hovers around $300-$400. It wouldn't
hurt to make a few calls to insure the fee you've been quoted
is within the range.
- Broker's Origination Fee: This is the commission
or "processing fee" you'll pay if you use a mortgage broker.
If you use a broker, he may be able to find you a loan for
a better interest rate than if you shop around on your own.
So it's usually a wash--you're basically paying for the
convenience of having someone else do all the legwork, and
that's often worthwhile. These fees start at a few hundred
dollars and go up to 1% of the loan, and some brokers require
the fee up front.
- Lender's Fee: For direct bank mortgage loans, this is a negotiable fee that covers
the administrative costs of processing your loan. Some lenders
pad this fee to make a profit but may be willing to cut
back on it, especially if you agree to pay point(s). Also,
the larger the loan, the more willing they'll be to bargain
- Credit Report: Typically, credit reports only cost
$8, but the report required by a mortgage company includes
much more detail and thus costs more--usually about $50.
You should not pay any more unless the fee includes other
services as well.
- Statement Fee: This fee is the biggest rip off;
it's the one your old lender may charge for providing payoff
information on your old mortgage to your new lender. It
may run around $60, and you should definitely fight it tooth
- Notary & Recording Fees: This may be negotiated
or even waived completely if the escrow officer takes a
shine to you.
- Overhead Fees: These fees entail such things as
processing, underwriting, wire transfer, or funding fees
and should be absorbed by your lender as part of the price
of doing business. You should therefore try to reduce or
even completely negotiate these away.
- Loan Origination Fee, or Points: This is a one-time
fee you may need or want to pay out to bring down the interest
rate on your loan. It's usually between 0.5%-2%, depending
on the mortgage amount. As a rule of thumb, the percentage
should decrease for larger loan amounts. If you plan on
staying in your new home for many years, it may be a good
idea to pay points up front so your monthly mortgage will
Since women seem to permeate the real estate industry, there's
a good chance you'll be working with a woman realtor. Generally
speaking, women realtors tend to be very willing to recommend
mortgage brokers that they frequently work with and trust,
and they'll often walk you through the mortgage application
My female realtor did all this and more. She recommended
that I work with her ex-husband as my mortgage broker, and
she never hesitated to pick up the phone and berate him if
she thought he was charging me a fee that was out of line.
She was wonderful--only wish she could've been there when
I bought my car.